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Creating Your Own Business
Future In This Chapter Discovering why you may be better off with your own business Understanding the relationship between you and your new business
Determining whether your current job is the right one Deciding when you are ready to start Transitioning from employee to business owner “Beautiful Woman store
Aren’t you supposed to go into the office today ?
” asked Judy’s husband Mike, nudging her shoulder from his side of the bed.
“Just let me sleep a little while longer.
It’s Saturday and I’ve had a long week,” grumbled Judy.
Mike sat for a moment waiting to see if she would say more.
She didn’t. “Okay. What’s up ?
You have a big contract proposal due on Monday, and I think you said that it will take
you all day to prepare it.
So what’s the deal ?”
Judy rolled over to face him.
He was right, and she knew it.
But she just wanted a day off, even if it was a Saturday.
On the other hand, she stood a reasonable shot at winning this proposal,
and it would set her up for at least three months of work.
Not a bad deal in a slow economy.
“I’m just missing being home with you and the kids,” she said.
“I get tired of working alone all the time, and the thought of working all day on
a weekend by myself while you guys are off playing bums me out.”
Mike had seen her like this before and had a proposal for her.
“Tell you what.
You get your butt out of bed and head into the office for the morning.
Get as much done as you can by 1 o’clock, and the kids and I will bring you
in some sandwiches.
We’ll do a picnic at work on that little lawn area.
” Judy looked resolute in her lethargy, so Mike pulled out the big negotiation guns.
He knew that once she started she would finish.
“Okay. I’ll sweeten the pot a little.
If you win this job, we’ll plan a vacation to spend some of the money you’ll earn.
How does a week in Paris sound ?”
Judy brightened up with the thought of a vacation.
It had been well over a year since they took some time off,
and she would need it if she won this project.
“Throw in lunch today with Paris and you have a deal,” she replied,
already heading toward the shower.
When you work as an employee, you always have one eye watching your boss
to make sure that he or she is happy with your work.
The boss and your peers are always an external motivator that helps to get you
into work on those days when you would rather stay in bed.
When you start your own business, you are the boss.
As your own boss, there is nobody to put pressure on you but you,
and if you do not perform, nobody inherits the problems more than you.
You are fully responsible for and to you.
It turns out that some people are not meant to run their own business.
There are plenty of people who prefer working for someone else.
In reality, some peopfle are better off working for someone else.
Understanding your own motivations is critical to deciding whether starting your
own business will bring you happiness or grief.
It’s really easy to start a business.
All you have to do is sell something or fill out a few forms, and you’re in business.
However, starting a business that will generate adequate and consistent income while providing personal reward is much more difficult.
It is actually more of a business science than a hard-charging, high-energy
Every journey has its beginning, and your journey to becoming a successful
small business owner starts right here.
In this chapter, we will discuss your interests, your personality traits, and the realities of leaving a job to start your own business.
This chapter will help you make decisions that will enable you to understand what is needed for you to create the right business future for you.
Making Your Next Job
Your Own Business If you are like most people I meet, you do not believe that you will be working for your current employer when you retire.
It may be that you have seen your fellow employees be “right sized,” and you are wondering when your turn will come.
It may be that you now don’t trust corporate life as the secure lifetime investment you previously assumed it to be and want to have more control over your employment destiny.
Perhaps you think management isn’t very bright and believe that you can do a better job running a business than they do.
Or maybe you already work for a small business and simply want to go off on your own.
No matter your reasons, at some point in the future you will almost surely change employers. You work for your employer by choice, and if a better job offer comes along, you will take it.
And in turn, companies lay people off even if they have enough cash on hand to
suffer a sales downturn.
Work might start feeling like a contracting relationship:
The contractor chooses the client and the client selects the contractor,
both knowing that the relationship will end at some future date.
They negotiate the financial and responsibility details that apply during the contracting period, but both know that the relationship is temporary and not one for life.
Once you realize that you are essentially a contractor, your approach to work changes.
You start to manage your time differently, always looking over your shoulder for your next engagement, knowing that the steady paycheck will at some point come to an end.
You start to increase your savings, knowing that you might have a period of no income between engagements.
You start to set up your medical and other personal benefits so that you,
and not an employer, have primary control over them.
Here are a few steps you can start taking now to provide yourself with more freedom,
either as an employee or as a new business owner:
Start building your savings today so that you have a minimum of 6 months of living expenses (12 months preferred) on hand to weather an unexpected job termination
or the new business startup period.
But don’t stop there—keep saving.
More cash will always pay off.
Start the personal evaluation and business planning process while you are still employed
to give yourself a running start should you be terminated or quit.
Knowing that you have employment options may make you more effective in your current job. Increase your business knowledge by taking business classes.
This will help you with your current job and also with your own business, and your employer may pay the tuition to boot !
Keep it to yourself that you are considering going off on your own.
You may never take the entrepreneurship plunge, and nothing is gained in letting
your co-workers or your employer know about your aspirations at this stage.
DEFINITION An entrepreneur is an individual who starts and runs his or her own business rather than remain an employee of someone else’s company.
You can open an antique store or start an at-home accounting business, and you are considered an entrepreneur.
If applicable, look for ways that your employer could become your first startup customer.
Only bring it up after you have a clear plan in place, money in the bank,
and the willingness to start the business.
If they think you have business ownership aspirations, they may let you go on the spot.
It does happen.
Be honest with yourself about your current job.
If it is one that allows you to do what you enjoy, to do what you are good at, to make a good income with solid benefits, and provides a sense of personal satisfaction,
why would you want to leave ?
There is little in professional life more satisfying than working with a group of dedicated people doing what they love while making a positive difference in the world.
Larger companies can provide this opportunity where, by contrast, starting your own business is usually a very solitary experience, especially in the early days.
Just know that a shifting of the economic environment at your company could cost
you your job through no fault of your own.
At that point, you want to have taken the steps outlined in this chapter to make sure
that you are ready for the change, perhaps using it as a starting
point for becoming a successful entrepreneur.
Just as you might occasionally envy the entrepreneurial lifestyle, the entrepreneur occasionally envies people who love their job working for someone else.
More than one entrepreneur has returned to corporate life after selling his or her own business simply to end the headaches that come with running one’s own business.
The Positives of Starting Your Own Business
In an uncertain job market, it only makes sense to do what any solid professional should be doing—looking for your next working opportunity.
You picked up this book to see if owning your own business is that next opportunity.
Let’s find out by presenting some realities of being your own boss.
Much of the uncertainty that comes with being an employee goes away when
you are the business owner.
For example: You will know before anyone else if your company is having trouble.
You will control your own benefits such as health insurance, life insurance, and pension.
If the company does well, you will have an opportunity to make more money from the success instead of staying with the same old salary.
You have direct control over what you do instead of having to answer to someone
else whose agenda might not put you at the top of their priority list.
If you are having problems with your boss, you can always have a heart-to-heart
to getthe problem resolved.
Hopefully you will have better results than with your current boss.
The benefits associated with running your own successful business are great,
and the rate at which new businesses are being created indicates that many have
already figured that out.
Maybe now it is your turn.
Startups are usually cash poor and must make do with as few employees as possible
to stretch out the initial funding as long as possible.
Keeping the employee overhead low is best accomplished with the founders doing as much of the work as possible until the cash flow becomes predictable enough to justify adding employees—along with their associated expenses.
The Negatives of Starting Your Own Business
The previous section presented some of the pros associated with running your own business, but there are also drawbacks that don’t always get talked about.
The buck starts and stops with you—if you don’t think it up, do it, or pay for it,
it won’t get done.
You are financially liable for all of the company’s obligations to vendors,
employees, and investors.
When you first start your business, there will likely be long hours and lots of uncertainty that can take a toll on you, your family, and your close relationships.
As your business becomes more successful, the level of financial obligation you will
inherit will grow as well.
As the business owner, it is not easy to leave because you will likely have to close down
the business or sell it, both of which are complicated options.
As an employee, if you get fed up with your current job, you can always find another one. Working for yourself can get pretty lonely; you will spend long hours working solo, especially when first starting out.
When you start out, you will likely be the sales, accounting, procurement, and operations departments as well as executive management.
In other words, it will just be you, and you will have to do it all until you are successful
enough to pay someone else to do it.
Beautiful Woman store
When you are accustomed to working for a larger company, you learn to depend on the
other employees and departments to handle much of the daily activity of business.
There is a tacit security in being part of a larger organization.
You take it for granted that these services will be done by someone else.
The good news is that as you become more successful, you will be able to hire people
to do many of these jobs.
The operational approach presented in Chapter 12 will help you figure out the positions
that will most likely be filled first so you can keep an eye out for people who
might be your first new employees.
More about hiring employees is included in Chapter 18.
Creative People Create Their Own Opportunities Now that we have looked briefly
at the pros and cons, let me ask you an honest question:
Is your current employer someone with whom you are willing to trust your professional
destiny and the financial security of your family ?
At the time of this writing, unemployment is running at high levels where roughly 1 out of every 10 people you meet on the street is unemployed.
Just remember that you and many other fine people have been caught in the squeeze of these tough economic times through no fault of your own.
But also remember that there is hope.
The United States has a $14 trillion economy, which means that a whole lot of money is passing between hands every business day.
You only need a tiny piece of that to make a decent living.
Sure, there is high unemployment, but the vast majority of people are still employed,
which means that they are earning a wage and still spending money.
There has always been promise for those creative enough to see an opportunity and resourceful enough to take advantage of it.
If you want to make your own business work, you can.
You are at least as resourceful as those who came before, aren’t you ?
Let’s take a closer look at the personality traits of entrepreneurs.
Your Business Starts with You
Perhaps the one characteristic that differentiates a small business from all others is the dramatic impact that the founders/owners have on the operation of the company.
There is simply no way to separate the owners from the company in the early stages. Customers write checks to the company name, but they think of themselves as doing business with the founder/owner.
After all, when a company is small, there is really only one major decision maker:
you, the owner.
Owners set the direction, ethics, quality, and values of their company, and those who think otherwise are kidding themselves.
You will create the public reputation and internal framework by which your future,
larger company will function.
I believe that you should create a framework that makes you money while also being
one you can happily live with.
Doing otherwise makes no sense to me.
The founders should have a clear handle on their own personality strengths and weaknesses, along with a comprehensive inventory of each founder’s specific skills.
In this way, they can use themselves to best advantage while keeping employee
Do You Have What It Takes ?
It is often difficult to separate fact from fantasy when evaluating founders,
their startups, and their successes or failures.
Mythology ranges from the boisterous and flamboyant sales guy who never shuts
it off to the poorly dressed engineer with Coke bottle–thick glasses who changes
the world from his basement.
Sure there have been successful startup instances involving both personality types,
but most of the rest of us fall somewhere in the middle and are pretty normal people…
whatever normal means.
Here are a few things that I have learned from entrepreneurs, about entrepreneurs.
Many have started multiple businesses with a common thread being that the first few attempts did not do very well.
Most resent bureaucracy and tend to fall behind in maintaining the administrative
sides of their businesses.
Most get restless when things are going smoothly and are always looking for that
next growth opportunity.
Most have a passion for whatever is the core competence of their successful business.
They may treat the business like it is a child to be nurtured at first, and treated differently later as a family member.
Don’t laugh. It will likely happen to you as well.
Think about it: you will likely spend more time with your business than with your family, all the while working to improve your family’s financial security.
Most will complain about the level of personal risk they live with, and then risk it all again on what they believe is their next great idea.
Many simply enjoy the process of turning ideas into successful businesses
and then selling them.
The challenge is what they value more than the particular industry or type of work.
Most earn a decent income, but very few earn the Bill Gates billions that make
such great publicity.
Again, depending on which statistics you believe, the average small business owner has a salary of somewhere between $50,000 and $100,000 annually, varying on the industry,
size of the company, location, and years in business.
In general, entrepreneurs are normal people with a strong work ethic and commitment to providing the best quality to their customers.
They enjoy the freedom that comes with running their own show and paying their own bills, and are willing to accept the responsibilities that come with having that freedom.
It is common for an entrepreneur to run his own businesses for a few years and then return to work as an employee of another company, no longer wanting to have the headaches associated with running their own shops.
These people often make great employees, as they have a more senior-level perspective of what is required to make a business run.
A lot of people are tired of working for “The Man.” And in today’s reality,
“The Man” might be a woman.
Around two out of every five businesses in the United States is owned by women, with the number growing at a faster rate than the national average for all businesses.
If many of these points ring true for you, then you might have the right stuff for becoming a successful entrepreneur.
Now it is time to see if you have the personality traits and skills needed to turn your business passion and idea into a profitable reality.
What Makes a Great Entrepreneur ?
Whether an entrepreneur is born or made is a topic for scholars and philosophers.
Suffice it to say that entrepreneurs come in all shapes, sizes, races, genders,
and nationalities, and that they have a few common characteristics that tend to differentiate them from those who work as employees.
These differences are not themselves criteria for success.
They are valuable when dealing with the typical demands of the entrepreneurial life.
To most effectively deal with typical startup situations, entrepreneurs must…
Have the ability to move forward in the face of large uncertainty.
Be willing to start—to get going when others might wait.
Be highly self-motivated.
Be willing to adapt along the way as things change from the expected.
Believe in their ability to do what must be done to fulfill their customer commitments
and business obligations.
Make the image of success secondary to functioning on a financial shoestring.
Have faith in their idea when others are not sure, while also not holding on too long to a bad idea that jeopardizes the financial health of the company or their family.
Be able to sell their products or services to prospective customers, and be perceptive enough to determine how to create a fit between the customer’s needs and their company’s offering.
Be able to quickly understand the important aspects of a situation, and then act appropriately to those important aspects.
STREET SMARTS Always look for what your customer cares about the most.
If your customer is primarily interested in the color of product X, you have to be perceptive enough to see that and talk about the color of product X
(not another color, or product Y and Z).
Avoid focusing on what you think is important at the expense of hearing
the customer’s feedback.
After all, he or she is the one who will write the check to buy your product.
You might as well listen.
What Are Your Strengths and Abilities ?
You may now be wondering how you personally size up against the traits exhibited by successful entrepreneurs.
Beautiful Woman store
The following quick assessment should not be treated as an absolute barometer of a “good” or “bad” entrepreneur temperament, but it will give you a general idea of how ready
you are to go off on your own.
Answer the following questions as honestly as possible by placing a number between
1 and 10 in the blank.
Use a 1 when you feel that the statement least applies to you and a 10 when it very
strongly applies to you.
This is important: don’t look at the paragraphs following this table before completing the personal assessment.
Answer as honestly as you can.
Personal Assessment Procedure Assessment Statement
(1 = LOW, 10 = HIGH) _________
I am comfortable with moving forward and making decisions when I don’t have all the answers to important questions. _________
I am typically the one initiating things for my family and friends or at work. _________
I can keep myself on track even when nobody else is watching or monitoring my performance or activities. _________
I can adapt my thinking and focus along the way as events change. _________
I trust my current capability level, and also believe that I can learn what is needed to meet future demands. _________
I care more about getting the job done than how good I look doing the job.
Performance is more important than image. _________
I trust my business judgment and am willing to move forward on what I believe to be a good business idea, even if others are not supportive of that idea. _________
I trust my sales ability and know that I can sell my business along with its products and/or services as well as anyone. _________
I tend to see the truth of a situation before others and can take the most effective actions for a given situation. _________
I have enough money in savings, or access to enough money, to pay my personal and business bills for at least six months. _________
Sum Total of All Rows Add up all the table rows and write that total on the Sum Total line. Your total number should be between 10 and 100.
No doubt you will score yourself higher in some areas and lower in others.
That is normal for all people, including entrepreneurs.
The following discussion will give you a general idea as to where you fit on the overall successful entrepreneurship scale.
Notice that the assessment tool also tells you something about your areas of strength,
as well as areas where you could use some improvement.
If you scored less than 50, you may not be ready today for starting your own business.
You may be better suited as an employee for now instead of being the person responsible for all of the pressure and uncertainty of running your own show.
Many very successful larger company employees fit happily into this category, so there is no negative connotation associated with being here.
If you believe your answers and you have already started your own business,
then I think you should look to surround yourself with people who are strong in the areas where you scored lower.
If you scored between 51 and 70, you show some entrepreneurship tendencies, but might be better off first working for a small business to see how you like it.
These are people who like the excitement of starting ysomething new,
but are not the people to get it started.
Many people in this group will follow the lead entrepreneur from one new company
to the next, making good money along the way and occasionally hitting it big
with a startup that skyrockets.